Short Term Rental Property FAQ

Q. What is a short-term rental?
A. A short term rental is a property that is rented on an overnight basis rather than on a long term basis which typically has a 6-12 month or longer lease. To qualify as a short term rental property the rental agreement must be less than 31 consecutive days.

 

 

Q. Are there specific regulations on Short Term Rentals I should be aware of?
A. Yes. The truth is the Short Term Rental business is a new one. Short Term Rental regulations vary by city, and are evolving and changing all the time. At HoltonWise we do our best to stay up to date on the latest regulations but you will need to do your due diligence as well to understand the laws and how they will affect your investment over time.

 

 

Q. Are short term rentals legal in the Cleveland, Ohio market?
A. This is a great question. As an emerging business there are frequent changes happening to the laws and regulations surrounding the operation of short term rentals. On a local, state and national level there are many debates on the interpretations of zoning laws and private property owner's rights. At HoltonWise we operate in many different cities throughout northeast Ohio, including Cleveland, Ohio. The frequency of policy changes combined with the large number of municipalities in the northeast Ohio real estate market it would be impossible for HoltonWise to provide investors with a definitive answer to this question. It is up to you as an investor to do your own due diligence as to the past, current and future legal ramifications of operating your property as a short term rental.

 

 

Q. Are short term rentals illegal in the Cleveland, Ohio market?
A. This is a great question. As an emerging business there are frequent changes happening to the laws and regulations surrounding the operation of short term rentals. On a local, state and national level there are many debates on the interpretations of zoning laws and private property owner's rights. At HoltonWise we operate in many different cities throughout northeast Ohio, including Cleveland, Ohio. The frequency of policy changes combined with the large number of municipalities in the northeast Ohio real estate market it would be impossible for HoltonWise to provide investors with a definitive answer to this question. It is up to you as an investor to do your own due diligence as to the past, current and future legal ramifications of operating your property as a short term rental.

 

 

Q. As a real estate investor how can I do my own due diligance as to the short term rental property regulations in Cleveland, Ohio and the surrounding municipalities?

As a Real Estate Investment Brokerage, we don’t provide legal advice, but we do want to give you some useful considerations that may help you better understand laws and regulations in the jurisdiction your short term rental property is located in. This list is not exhaustive, but it should give you a good start in understanding the kinds of laws that may apply to you should you attempt to operate your Cleveland area property as a short term rental investment. If you have questions you should always contact the local government and or a lawyer and/or tax professional.

  • Business Licenses: Many jurisdictions require owners or operators of certain businesses to apply for and obtain a license before the business can be operated. Many local governments have sections of their websites explaining the business licensing process, and providing you with relevant forms and information. Contact your local jurisdiction for more information.
  • Building and Housing Standards: Most local governments and many jurisdictions have rules and regulations specifying minimum construction, design, and maintenance standards for buildings, including regulations on habitability, health, and safety. Certain rules applicable to residential and non-residential uses may be relevant to your listing. Some jurisdictions may also require an inspection of your property to make sure it meets minimum habitability standards. Contact your local government to find out what standards apply to your listing.
  • Zoning Rules: Most cities or other local jurisdictions have laws that set out the way you can use your home. These rules are often found in a zoning code, planning code, or city ordinances. You should consult these rules or regulations to see if your listing is consistent with current zoning requirements or use definitions, or contact your local government directly.
  • Special Permit: Some jurisdictions may require a special permit to rent out your home. Contact your local government to see if you need one, and, if you do, how to get it.
  • Taxes: Many jurisdictions require hosts to collect a tax for each overnight stay, and pay that tax to the city or other jurisdiction. Contact your local government to see if you need to collect any taxes. In certain jurisdictions Airbnb automatically collects and remits certain taxes on your behalf. Learn more.
  • Landlord-Tenant Laws: When hosting longer stays, you may be subject to landlord-tenant laws that vary by jurisdiction and may impose more onerous legal obligations on you and provide guests with certain additional legal rights. For example, in certain jurisdictions, guests who stay in a home or apartment for a certain period of time—the exact number of days depends on jurisdiction—may establish rights as a tenant. Generally, this means that local tenancy laws could protect them, and you may not be able to remove them from your property without proceeding through required eviction processes. Consult a local lawyer specializing in landlord-tenant law to learn more.
  • Other Rules: It's also important to understand and follow other contracts or rules that might apply to your listing, such as leases, timeshare ownership rules, condo board or co-op rules, homeowners association (HOA) rules, or rules established by tenant organizations. Read your lease agreement and check with your landlord, if applicable. If you live in rent controlled or stabilized housing, there may be special rules that apply to you. Contact your local government to ask questions about this topic.

 

 

Q. What is the property's rental history?
A. Many buyers’ first question when a property piques their interest is to ask to see the past rental history. The number one rule in short term or vacation rental investing is that past performance is not always an indicator of future performance. Many short term and vacation rental property management companies are mom and pop operations that do not fully utilize all of the technology that is available, and quite often achieve significantly lower rental numbers than what the property could bring in if it was managed by a sophisticated company like Holton-Wise. It is more important to be concerned with what a property can achieve under the RIGHT circumstances as seen on HoltonWiseTV. This is where Holton-Wise can add significant value to investors by giving them the tools, knowledge and resources to create the right circumstances for a property to reach its full potential.

 

 

Q. What is the expected short term rental property occupancy rate in Cleveland?
A. There is no simple way to answer this question. The reality is that every property is going to perform independently. That said, data directly from Airbnb's website states that houses in the Cleveland market (Cuyahoga County) have an average historical occupancy rate of 62% across their entire platform.

 

 

Q. Will my Cleveland short term rental property be harder to book in the winter?
A. Yes. It's no secret that the Cleveland area has very cold winters. This will lead to a lower occupancy rate in most short term rental properties during this time and a spike in occupancy rate during the warmer months. While the exact drop will be difficult to measure you should know that data directly from Airbnb's website states that houses in the Cleveland market (Cuyahoga County) have an average historical occupancy rate of 62% across their entire platform on an annual basis.

 

 

Q. Will I be able to vacation in my Cleveland short term rental whenever I want?
A. Yes. So long as you provide Holton-Wise with advance notice so we do not book the dates you want to other guests you can book as many or as few days of your own whenever you please. Note that normal monthly management fees will not be adjusted based upon how frequent or infrequent you choose to stay in your short term rental yourself.

 

 

Q. Do I have to close my short term rental property sale in person?
A. No. Closing remotely is very common and is usually the most convenient way for buyers to close on their property. At HoltonWise we work with real estate investors from all over the world, both in the United States and outside of the United States. In both situations closing your short term rental property sale can be done remotely without you having to travel to the Cleveland, Ohio area.

 

 

Q. If I hire HoltonWise to manage my short term rental property will I be able to pick out the colors, décor, finishes, furniture, appliances, electronics, kitchenware and or supplies used in my short term rental property?

A. No. At HoltonWise we have a minimum level of quality standards that a property must meet in order for us to manage it as a short term rental property. In addition we provide our investor clients with optional premium upgrades to increase guest satisfaction, occupancy rate and average nightly rental rate. To maximize investor returns, while also achieving this minimum level of quality standards, HoltonWise utilizes a streamlined process for the renovation, staging and stocking of all of the short term rental properties in the HoltonWise property management portfolio. This streamlined process involves a balance of managing supplier inventory availability, keeping our investor client's renovation and supply costs low, providing the guests with a great experience during their stay and an appropriate level of employee training and familiarity on all of the appliances, furnishings, electronics, supplies and materials that are used in properties in the HoltonWise property management portfolio. The utilization of this streamlined process is the only way that HoltonWise can keep our costs as competitive as they are, and our anticipated property renovation and setup times lines as quick as they are, while also maintaining an acceptable level of guest satisfaction and corresponding host rating on all of the various short term rental property websites we utilize.

 

 

Q. If I hire HoltonWise to manage my short term rental property can I buy the colors, décor, finishes, furniture, appliances, electronics, kitchenware and or supplies that I want and ship them to HoltonWise to use in my short term rental property?

A. No. At HoltonWise we have a minimum level of quality standards that a property must meet in order for us to manage it as a short term rental property. In addition we provide our investor clients with optional premium upgrades to increase guest satisfaction, occupancy rate and average nightly rental rate. To maximize investor returns, while also achieving this minimum level of quality standards, HoltonWise utilizes a streamlined process for the renovation, staging and stocking of all of the short term rental properties in the HoltonWise property management portfolio. This streamlined process involves a balance of managing supplier inventory availability, keeping our investor client's renovation and supply costs low, providing the guests with a great experience during their stay and an appropriate level of employee training and familiarity on all of the appliances, furnishings, electronics, supplies and materials that are used in properties in the HoltonWise property management portfolio. The utilization of this streamlined process is the only way that HoltonWise can keep our costs as competitive as they are, and our anticipated property renovation and setup times lines as quick as they are, while also maintaining an acceptable level of guest satisfaction and corresponding host rating on all of the various short term rental property websites we utilize.

 

 

Q. Can I review the Holton-Wise Property Management agreement & fee structure?

A. Yes, absolutely. Below is a copy of our management agreement that goes over all of Holton-Wise's duties & responsibilities to you as your property manager. The agreement also lays out our fee structure in complete detail. It is available for viewing and downloading at your convenience.

 

Holton-Wise Property Management Agreement
HWPG PROPERTY MANAGEMENT AGREEMENT W9 [...]
Adobe Acrobat document [1.0 MB]
Holton-Wise Short Term Rental Property Addendum
HWPG SHORT TERM RENTAL ADDENDUM.pdf
Adobe Acrobat document [177.5 KB]
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